Concept

Total capex (battery-limits → total plant)

Overview

Total capex is the full one-time capital to deliver a working plant — the equipment build rolled all the way up: installed process units (ISBL), plus off-site infrastructure (OSBL), plus indirects (engineering, fees, contingency), plus working capital. It’s the loaded figure that gets annualized and divided into levelized cost — not the bare equipment or ISBL cost.

Body

What “total” adds to the equipment build. Capex as the equipment build stops at installed ISBL. The standard factored roll-up from there:

1. + OSBL — off-site infrastructure (utilities, storage, site works), a fraction of ISBL. ISBL + OSBL = direct field cost.
2. + Indirects — detailed engineering, construction management, contractor fees, as factors on direct field cost.
3. + Contingency — an allowance for the estimate’s own incompleteness, sized to its accuracy class. The expected cost of what’s unresolved, not a discretionary buffer.
4. = Total fixed capital.
5. + Working capital — initial inventories, spares, and cash to start; recoverable at end of life but tied up throughout.

= total capex (total project capital).

Each layer multiplies the one beneath. OSBL factors ISBL, indirects factor direct field cost, contingency factors that — a stack of multipliers (see battery limits), so an ISBL-base error scales through every layer to the total. The Lang factor is the one-step shortcut that collapses the whole stack into a single multiple of purchased-equipment cost.

Contingency tracks the estimate’s maturity — larger when less resolved, a feature of the accuracy class, not a worse project. Dropping it to report a lower number reports a best case the accuracy class says is unlikely.

What it feeds. This is the figure the capital recovery factor annualizes, which — spread over output — becomes the capital share of levelized cost. When a TEA quotes “the capex,” this is the defensible figure.

Limits & typical error

• Quoting ISBL or installed equipment as total capex understates the plant — ISBL can be ~half of total fixed capital, so reporting it as “the capex” understates total capital by something approaching 2× (worse for purchased-equipment cost).
• Dropping contingency reports an unlikely best case — omitting the contingency the accuracy class calls for presents the estimate as if every unknown breaks favorably; lower and more precise-looking, less likely realized.
• The multiplicative stack amplifies the base error — a ±30–50% factored base stays ±30–50% at the total; a single-point total capex implies precision the method can’t deliver.
• Layer-scope double counts and gaps — mixing a factor that already includes a layer with that layer added again (a Lang factor plus OSBL), or counting an interface item in both ISBL and OSBL. The total is invariant only if each layer is counted exactly once.
• Omitting working capital understates start-up capital — inventories, spares, and start-up cash are real capital committed for the plant’s life, though recoverable.

Mini-example

Rolling the green ammonia plant up from ISBL. Take installed ISBL ≈ $500M as a round, illustrative anchor (order-of-magnitude for a ~1,000 t/day plant). + OSBL at ~40% of ISBL (the battery-limits anchor) → direct field cost ~$700M; + ~30% indirects and contingency → total fixed capital ~$910M; + $90M working capital → total capex **$1.0bn**. That ~$1.0bn — not the $500M ISBL — is carried into the capital recovery factor and levelized cost.

Edge case: reporting the $500M ISBL as the project’s “capex” would halve the apparent capital and, once annualized, halve the capital share of the per-tonne cost — the classic understatement from quoting the inside-the-fence figure as the whole plant.

See also

• Capex
• Battery limits (ISBL / OSBL)
• Installation factor / Lang factor
• Capital recovery factor (CRF)
• Levelized cost (e.g., $/t NH₃)
• Uncertainty & accuracy class (FEL-1/2, ±30%)